Crowdfunding provides 'long-term answer for renewables'

EXCLUSIVE: Crowdfunding is emerging as one of the best sources of investment for renewable projects looking for long-term funding, and a viable alternative to bank lending.

Abundance MD Bruce Davis said many crowdfunders are willing to lend for 20 years when banks will not

That's according to Bruce Davis, the managing director of crowdfunding platform Abundance Generation, and the director of the UK Crowdfunding Association.

Speaking exclusively to edie, Davis said: "Most banks won't lend long term so you have a hit on your cash flow after a few years, whereas many of our crowd-funders are willing to lend over 20 years."

Davis also dismissed recently aired concerns that crowdfunding could actually hinder the long-term development of a company by discouraging more traditional investment in in the future.

Davis said: "There's nothing about crowdfunding that make it worse or better for the company involved. That's something that the traditional investment community, the venture capitalists and angel investors, like to say because they feel threatened by crowdfunding.

"Its nothing but hypocrisy. Increasingly we can demonstrate that that sort of thing just doesn't occur and it hasn't been an issue. We've seen second round funding coming into crowdfunded firms. Usually that moneys coming from venture capitalists, so the exact thing that's been said doesn't happen, absolutely does."

"We've also seen one or two crowdfunded schemes go on to list on the stock exchange. All that happens, is those crowdfunders now have the benefit of owning listed shares which they can buy and sell as they want."

Davis did also note that recent subsidy changes have affected the pipeline of projects looking to raise finance on Abundance.

"One issue we saw was companies needing to raise money in a timely fashion to reach subsidy deadline [such as the end of the ROC for solar companies]. That can affect us, because we're talking about three months for a £2-3m pound raise, which is substantially longer than the banks."

That said, Davis was confident any slowdowns would be short-lived. "We're still growing," he said. "We have just gone through £9.5m raised and we should have two or three new projects coming online in the next few months."